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The Forum > Article Comments > Reducing emissions or redistributing income: why is Australia pricing carbon? > Comments

Reducing emissions or redistributing income: why is Australia pricing carbon? : Comments

By Geoff Carmody, published 2/8/2012

Australia’s carbon pricing policy is an engineered exchange rate.

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Wonder how many of the Politicians have restructured their share portfolio's and family trusts to enjoy the benefits of this redistribution of wealth.
Posted by JamesH, Thursday, 2 August 2012 8:35:10 AM
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I agree that Australia's carbon tax is not going to make much difference unless there is a contagion effect. CT should be more like $40 in order to dispense with renewable subsidies and replace brown coal with gas. However gaming of the system will ensure the international carbon price stays on or below $10. That low price is because the EU 'grandfathers' free permits and also allows lavish use of CDM offsets which many believe are an accounting fiction. In theory the EU ETS should toughen its rules from 2013 but I doubt they have the cojones.

Then there is also the slight inconsistency of coal and LNG exports. I estimate they generate 770 Mt of CO2 a year as opposed to 550 Mt of domestic emissions including transport, land use etc. Globally it would be more effective to cut our coal exports 5% than domestic carbon. That 5% domestic cut 2000-2020 is rather pathetic given our world leading emissions. We should aim for 25-40%.

Ideally Australia should be able to retain a high CO2 floor price and not have to buy fraudulent carbon credits from the EU. I wonder if we should use carbon tariffs as a support mechanism. It might catch on.
Posted by Taswegian, Thursday, 2 August 2012 8:51:02 AM
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I agree with the thrust of the article, and add that voters by now must be wondering if anyone at all is able to say how climate will shift in the years ahead. The prognostications of what will happen to us don't mesh with what has happened. Yes, the AGW people will say that this is weather, not climate, but temperature has stopped following carbon dioxide accumulation in the atmosphere, as it was doing in the 1980s and 1990s.

I have a post or two on carbon tax and the climate change issue on my website: www.donaitkin.com
Posted by Don Aitkin, Thursday, 2 August 2012 8:53:54 AM
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Good article Geoff.

One has got to wonder: if Infrastructure and Transport Minister Albanese can see these fundamental flaws in the carbon tax methodology and can freely express them, then why are they there?

His Labor colleagues, or some of them at least, can surely also see the fundamental flaws in the system, and could do so well before the nature of this tax / pricing scheme was finalised.

I suspect that there are some fundamentally good people in Labor who wanted to see this policy developed in the most effective manner, but that vested-interest big-business donations and other pressures rendered it basically neutered.

You wrote;

< Any benefits from pricing carbon come from reducing global greenhouse gas emissions compared with ‘business as usual’. >

Trouble is; with this tax, it IS effectively still business as usual, just with a light green veneer!

The thing that would surely have made a huge difference in the level of acceptance by the community would be the factoring in of peak oil, or of the prospect of rising oil prices in the near future.

There is much more merit in spurring a reduction in oil usage and a development of alternative energy sources for this motive than there is for addressing climate change.

And yet our government has completely left this out of the picture and apparently refuses to acknowledge that there is any probable looming oil crunch!!

I've also got to wonder about the enormous hypocrisy of implementing a policy like the carbon tax, which is designed to reduce average per-capita carbon emissions, while our government is at the same time imposing upon us a very rapid ongoing rate of increase in the number of 'per-capitas' via record high immigration and a spurring of the birthrate!
Posted by Ludwig, Thursday, 2 August 2012 9:18:48 AM
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Why don't we have a Stupidity Tax ? Now there's an un-tapped pool of revenue !
Posted by individual, Thursday, 2 August 2012 10:49:46 AM
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Geoff Carmody,

Thank you for a clear explanation of some of the problems with our carbon pricing legislation. The legislation is so bad it is hard to understand how our Federal Government could have decided to impose it on Australia.

I recognise that you and many economists who specialise in carbon pricing studies advocate carbon pricing, by one mechanism or another, as the least cost way to reduce global GHG emissions.

However, I am far from persuaded that any of the various carbon pricing schemes will reduce global emissions significantly without doing great damage to the participating countries’ economies and the global economy and, therefore, to human well being.

For example, it seems the Australian CO2 tax and ETS will cost at least $10 for every project $1 of benefits. Furthermore, it seems the costs will be far higher than the $10 and the actual benefits far less than $1. The basis of this is laid out here
http://jennifermarohasy.com/2012/06/what-the-carbon-tax-and-ets-will-really-cost-peter-lang/.

Is there any error in this benefit/cost analysis (which uses Treasury’s figures)?
Posted by Peter Lang, Thursday, 2 August 2012 11:18:07 AM
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